Realty sector affected by the new regulatory bill

Impact of regulation on builders and developers

“Many markets have seen strong impacts of regulation on the real estate development market. In Dubai for example the real estate regulation bills, caused much more successful completion of projects and faster execution. So it is our view that once this regulation is impacted and the real estate bill is passed there would be much better progress of developers completing projects on time and not miss utilizing funds. So the impacts on developers and builders will be very positive. However, only the high quality developer and professional builders will be able to survive and lot of the first time developers and builders will be unable to complete projects and

will not be able to expand their business without having completed their previous projects,” Mr. Samarjit Singh, MD, IndiaHomes said.

Comments concerning customer’s viewpoint

“From a customer point of view the regulation bill is a boon because what it will do, it will ensure that the developers are accountable and are licensed by a centralized body to make sure that they look after their customers and make sure that their commitments to the customers are met. So we see this as a huge confidence in builders, in the real estate sector. The moment there is some clarity on the actual execution of the real estate regulation bill, we believe that customers will get much more confidence and will be much happier in investing in real estate projects.”

Change in pricing trends

“We expect that there will be a marginal increase in the price of the residential real estate and this is largely because of the cost of complying with the legislation will be passed on to the customers and developers will not be able to use cash flows for cross subsidy of projects. So we expect a 2-5% increase in price in the residential real estate post of the bill having being passed”.

Effect on buying trends

“We believe that impact on buying of real estate will be extremely positive, as many people who do not have faith in the real estate eco-system and developers, will immediately turn around and buy a property. They will be very confident and comfortable that the developer will execute the projects and deliver their homes on time and therefore will be much more comfortable in making investments. So we expect great buoyancy and see a positive trend the moment the regulation bill is brought in”.